AP News

CEO says MGM may sell parts of CityCenter in Vegas


LAS VEGAS (AP) — MGM Resorts International says it needs to reduce its debt and sees selling off parts of its city within a city project on the Las Vegas Strip as one way to pull the company out of the red.

CEO Jim Murren told The Associated Press Wednesday that the company would consider selling pieces of its $8.5 billion CityCenter project in the future.

MGM executives emphasized the importance of deleveraging the company during a conference call to discuss fourth quarter earnings with investors and analysts.

Debt for CityCenter stands at about $1.85 billion, down from $2.5 billion 12 months ago.

The complex eight times the size of the Bellagio fountain attraction was built during boom times, but opened in 2009 amid the recession that crippled the Las Vegas tourism industry. It houses the 4,000-room Aria hotel-casino.

Murren said the condos and retail elements of the 67-acre project were designed to draw people to Aria.

"Aria is not an asset that we would ever consider selling," he said. "But the pieces around Aria are certainly opportunities for sale."

While there are no negotiations under way, the 500,000-square-foot luxury mall Crystals is especially enticing to investors, Murren said.

Several other casinos on the Las Vegas Strip are connected to malls run by outside companies, including Caesars and the Venetian. Crystals, which Murren said was designed to ultimately be sold, features upscale brands including Gucci, Prada and Tiffany & Company.

Murren also mentioned the possibility of selling Vdara, which opened as a condo-hotel at a time when the Las Vegas condo boom was crashing, or the Mandarin Oriental.

Asked during the conference call Wednesday about improving the project's value for shareholders, Murren said one option was to monetize portions of the complex, including the mall.

"That's a target opportunity for us that could raise a tremendous amount of money for its owners down the road," he said of Crystals.

MGM owns CityCenter in a 50-50 partnership with Dubai World, the investment arm of Dubai's government.

Murren said analysis could rest assured that "both partners have a lot invested in this and we will be looking to pull money out of that venture in the future."

Murren was coy about the fate of the Harmon Tower, has sat empty on prime Strip real estate since a construction defect was found in 2007. MGM remains in litigation with its contractor over who is responsible or the flaw.

Murren said he was "open to suggestions" about what should replace the building once it's demolished.

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Hannah Dreier can be reached at http://twitter.com/hannahdreier.


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